Shipping Industry sailing towards zero carbon emissions


As discussed at the United Nations Climate Change Conference COP27, shipping is sailing towards zero carbon emissions. A fairly ambitious goal that needs developments, actions and regulations from joint work of the academia, the private sector and governments to be achieved, according to the World Economic Forum.

The shipping industry aims to align with a 1.5 degree Celsius trajectory in accordance with the Paris Agreement, this requires zero emission fuels to account for 5% of international shipping fuels by 2030.
Shipping’s innovative 2030 goal is based on increased technology supply, fund mobilization, supportive policy measures, aggregate demand for scalable zero-emission fuels, and an equitable approach that ensures a truly global transition.
Actively tracking the industry’s progress towards the 5% will help identify current gaps and challenges to inspire action.

The shipping industry contributes to nearly 3% of global greenhouse gas emissions annually. If it were a country, it would be considered the sixth largest emitter. This form of transport, however, is critical to the movement of goods, as around 90% of world trade is carried out by ship, and public and private stakeholders are working to understand how to make it more sustainable.

For the shipping industry to reach a 1.5 degree Celsius target in line with the Paris Agreement, the sector must meet its groundbreaking 2030 target of scalable zero emission fuels accounting for 5% of the fuel mix. of international maritime transport. As 2030 fast approaches, there is a need for greater transparency and accountability on progress towards this goal. In 2021, UMAS drew up an action plan to deliver zero-emission fuels in maritime transport. Now, the UNFCCC and UMAS High-Level Team of Climate Champions, with the support of the Getting to Zero Coalition, have released a progress report indicating that the sector is partially on track, but there are some bottlenecks to address to scale up. the impact.

5 levers of change that support the energy transition of maritime transport
This fuel transition can be divided into three phases: an initial emergence, where the innovation increases the market viability of the new fuel; diffusion, where the new fuel increases its market share and price competitiveness compared to existing options; and reconfiguration, where the new fuel achieves market dominance. The shipment is now in the emergency phase and five different sets of levers will support its progress from emergency through diffusion to reconfiguration.

The actions must be carried out by several actors in terms of technology/supply and demand related to the new fuels. These include: development of fueling infrastructure, fuel production, on-board propulsion innovations, and consolidation of demand for zero-carbon freight transport; financial and political mechanisms that can support the transition; and, finally, civil society action by individuals and organizations to expand the representation, urgency, and visibility of shipping decarbonization.

The shipping industry's five change levers to energy transition Image: UMAS & High Level Climate Champions, 2022
The shipping industry’s five change levers to energy transition Image: UMAS & High Level Climate Champions, 2022

All five levers are partially on track, with some progress already made, but there are still many areas where progress is needed. In terms of demand and technology/supply, there are already at least 203 maritime transport decarbonization pilot and demonstration projects under preparation at the international level. Progress has also been made in relation to fueling and safety guidelines.

Now, the main challenge is to move from commitments to investment and infrastructure development. In reference to financing, there are growing commitments, such as the Poseidon Principles, which represent more than 50% of the financing of the maritime transport debt, but it is necessary to continue advancing in the financial commitments for the production of fuel and the infrastructure of fueling.

Policy developments have also progressed, with IMO developments on short-term measures and GHG emissions pricing. Similarly, civil society developments have intensified with the increased visibility of various initiatives, but more opportunities in emerging economies need to be seized.

Implications for shipping and other stakeholders
The last two years have seen significant progress towards the 2030 goals in terms of alignment, with all players in the value chain uniting behind this common goal to lay a solid foundation. We are, however, at a crossroads. More efforts are needed to turn these commitments and promises into workable solutions.

Energy companies need to have greater confidence in the expected demand from the shipping sector when planning green energy development projects. Cargo owners must be mobilized to engage in cross-supply chain collaboration and investment, including paying a premium for zero-emission fuels on a corresponding percentage of their cargo. Investors must quantify the amount of investment needed throughout the value chain. Shipping companies need confidence to plan and invest in new construction and retrofits. And, regulators must ensure that there is a level playing field to allow for the transition.

Understanding which actions are progressing well and which are falling behind is critical to mobilizing effort where it is most impactful. International action is required at the IMO as, without this, the 5% target becomes elusive. For rapid and large-scale adoption of carbon-free fuels needed in the 2040s, a sector-wide decarbonization policy is key to mass adoption.

Furthermore, international policy developments are needed at the IMO and at the plurilateral level to accelerate global decarbonization trends. These should include the timely adoption of short- and medium-term measures at the IMO that are in line with the adoption of the 5% SZEF and full decarbonization by 2050.

National policy is critical to supporting the production and bunkering infrastructure needed to decarbonize domestic shipping. In addition, a multitude of wide-ranging industrial actions are needed across the shipping industry. This includes investment in the development of SZEF production pathways, with more than 210 production facilities, and the availability of SZEF in at least 20 key ports along with investment technologies for use on board.

Cargo buyers will also have to commit to accepting at least 5 million TEUs of zero-emission cargo by 2030. Shipowners will also have to commit to ordering only zero-emissions-ready ships. Finally, industry involvement in short-term R&D, pilots and demonstration projects will help shape best practice and increase cross-value chain engagement.

The road to decarbonising the shipping industry Image: UMAS & High Level Climate Champions, 2022
The road to decarbonising the shipping industry Image: UMAS & High Level Climate Champions, 2022

Opportunities for future actions

This marks an important milestone on the road to COP27. It points out that a real shift towards delivery, including all state and non-state actors, is needed to drive real change. However, this change will not be possible without radical collaboration across the maritime value chain and through the value of public-private partnerships working together to drive the necessary transformation at every level.

The 5% advance target for 2030 is the floor, not the ceiling. If we don’t take early action now to make deep emission reductions this decade, the transition will be more disruptive and costly in the future. COP27 provides a platform to continue to unlock barriers and rapidly enables and scales pockets of solutions occurring in the sector.

It is clear that the shipping industry intends to take a leadership role in the just, healthy and resilient transition to a carbon-free world. We must continue to monitor and track our progress towards this and see it as a signal to strengthen collaboration, pick up the pace and turn commitments into action.

Source: World Economic Forum & United Nations Climate Change Conference COP27


Deja un comentario aquí:

This site uses Akismet to reduce spam. Learn how your comment data is processed.